I just went self-employed. How long before I can buy a home?
The direct answer
Yes, you can get a mortgage with less than two years of self-employment when your earlier work was in the same field, and I offer those loans in California, Utah, Oregon and Arizona. FHA allows between one and two years only where you were previously employed in the same line of work, or a related occupation, for at least two years. Fannie Mae allows less than two years where your most recent signed returns reflect a full twelve months from the current business, with documented prior earnings in the same field. If you already own a home and want a line of credit instead, the bank statement HELOC I offer has no set minimum time in business: see Can I get a HELOC if my business is less than two years old?
Two years is the usual benchmark. Fannie Mae generally requires a two-year history of prior earnings, and FHA allows self-employment income where the borrower has been self-employed for at least two years.
Zach von der Linden, mortgage broker and Branch Manager, West Capital Lending · NMLS 1652805
Wholesale pricing · California, Utah, Oregon and Arizona
5.0 across 66 reviews on Experience.com (read on 2026-09-24) · Text reaches Zach directly · Last updated 2026-10-20
No credit pull happens from a conversation. Texts go to Zach's cell.
What clients say
Zach was great. Easy process and he took care of the little things that needed to be done to close the loan and offered up sound advice throughout the process.
Zach, was great to work with. He was super responsive and even when there was challenges or delays he would communicate the needs and we worked through them. We very happy with our experiance and the service we received, and we are even more excited with our new home!
Word for word from Experience.com. Read all reviews.
You left a job you were good at to do the same work for yourself, and the first thing anyone told you was that you cannot buy for two years. That is the usual benchmark, not the whole rule.
Is this page about my situation?
The work did not change when you went out on your own, but the paperwork that proves it did.
A W-2 job proves itself with a pay stub and a phone call. Self-employment proves itself with filed tax returns, which arrive once a year after the year is over. That lag is why somebody eighteen months into a thriving business looks thinner on paper than the week before they quit.
The rules ask how long you have been doing this, whether you did the same thing before, and what your returns show. Prior experience is a written condition in the shorter-history allowance rather than background.
If you are paid as an independent contractor on a 1099, this page is yours too. Lenders generally read contractor income as self-employment income, from filed returns rather than from the 1099 forms, and requirements vary by program and lender.
Your rate and costs depend on your credit, combined loan-to-value, lien position, the loan and program you choose, and fees. The options check shows your own terms before any hard credit pull.
Does this fit you?
Who this tends to fit
- You went self-employed recently, doing work you already did for somebody else.
- You can document the earlier work with W-2s, past returns, or a verifiable employment history.
- You have filed, or are about to file, a return that covers your self-employed income.
The eligibility facts that matter most
- The two-year benchmark: Fannie Mae generally requires a two-year history of prior earnings, and FHA allows self-employment income at two years or more.
- The shorter path on an FHA file: between one and two years is allowed only where you were previously employed in the same line of work, or a related occupation, for at least two years. Below one year the handbook sets no path.
- The shorter path on a conventional file: less than two years may be considered where your most recent signed returns reflect a full twelve months from the current business, with documented prior income at the same level in the same field.
- What makes you self-employed: Fannie Mae treats a twenty-five percent or greater ownership interest in a business as self-employment, and what gets read is filed federal returns with all schedules, or IRS transcripts, rather than deposits.
- Profit and loss statements: FHA requires a year-to-date statement once more than a calendar quarter has passed since your last year-end tax period, and a balance sheet too, except for Schedule C filers. Lenders add their own requirements on top of all of this.
- How the number is built: FHA directs the lender to use the lesser of the two-year average, the average over the time the income has been earned where a shorter history is permitted, or the one-year average, so one strong year does not pull it up.
When another route may fit better
- You are under twelve months in, where the shorter-history paths on this page may not support the income yet. Zach checks whether another documented income, a co-borrower or a different program applies before telling you to wait.
- Your earlier work was in a different field, which is what the continuity condition is written to exclude.
- You have not filed, or income dropped after the switch and lands badly in a lesser-of calculation.
- Your real question is about write-offs rather than time, which has its own page here.
Do I need two years of 1099 income to get a mortgage?
Here, I'm talking about income from independent-contractor work, not every kind of income that arrives on a 1099 form.
Two years is the usual benchmark, and it is the same benchmark this page already describes. Lenders generally read contractor income the way they read self-employment income: from your filed returns, not from the 1099 forms themselves. Fannie Mae generally requires a two-year history of prior earnings, and its shorter path asks that your most recent signed returns reflect a full twelve months from the current business, with documented prior earnings in the same field. FHA allows between one and two years only where you were previously employed in the same line of work, or a related occupation, for at least two years.
The history requirement and the document requirement are related but not identical. You can have the months and still lack the return that proves them. Requirements vary by program and lender, and I confirm which rulebook applies to your file before anything is counted.
I switched from W-2 to 1099 in the same field. Can I still buy?
Sometimes, and the same-field part is the condition that matters, not the 1099 form. FHA allows self-employment income between one and two years only where you were previously employed in the same line of work, or a related occupation, for at least two years. Fannie Mae's shorter path asks for documented prior income at the same or a greater level in a field that provides the same products or services, or in an occupation with similar responsibilities, and for most recent signed returns that reflect a full twelve months from the current business.
What I need to see is the continuity: the W-2s from before the switch, what the business does now, and the returns you have filed since. Doing similar work does not qualify you on its own. The records have to show it, and whether a lender uses the shorter path at all is the lender's decision.
Changed from employee to contractor? Text me when you switched, what you did before, whether you have filed a return covering the business, and whether you already have a closing date.
Is one 1099 form enough to qualify for a mortgage?
No. A 1099 shows what one payer reported sending you in one year. It does not show your expenses, the net income a lender counts, or whether the income covers a full year of the current business. Fannie Mae's standard documentation for a self-employed borrower is signed federal income tax returns filed with the IRS, with all applicable schedules, or IRS transcripts of those returns. FHA asks for a year-to-date profit and loss statement once more than a calendar quarter has passed since your last tax year ended.
Bring the 1099s to the first conversation. They help me read the file; the return is the document that qualifies.
A worked example: two timelines, one person, no dollar figures
The question is when, so this example is a pair of timelines. The one difference between the columns is when she files her first self-employed return.
| When | Timeline A: files the first return as soon as it can be filed | Timeline B: files an extension and sends the same return in the fall |
|---|---|---|
| March, year one | She leaves a W-2 job to do the work she did for eight years as an employee. | Identical. |
| December, year one | Ten months of self-employment sit inside the year-one tax year, and ten months is not twelve. | Identical. |
| February, year two | She files the year-one return at once, so both of her most recent returns are on file. | She files an extension, so the documentation set cannot be completed. |
| March, year two | Twelve months self-employed. FHA allows self-employment income between one and two years where the borrower was previously employed in the same line of work, or a related occupation, for at least two years. | Twelve months as well, but the lender still needs the filed return. |
| April through September, year two | A calendar quarter has passed since the year-one tax period closed, so a year-to-date profit and loss statement is required. | The extension runs to September, and only then can the same file be assembled, seven months later. |
| The conventional test, either way | Fannie Mae’s allowance for less than two years asks that the most recent signed returns reflect a full twelve months from the current business. A ten-month return does not, however early it is filed. | Same answer, for the same reason. |
| February, year three | The year-two return is the first reflecting twelve full months, which opens that allowance. | On extension again, so the allowance waits with the return. |
| March, year three | Two full years self-employed, and filing dates stop mattering. | The same date, the same rule. |
What this example accomplishes
It puts a date on something usually answered with a shrug: the month an FHA file becomes possible, the month the conventional allowance opens, and the month the ordinary two-year path arrives.
It also shows where the filing choice bites. It does not move the rule, it moves whether you are ready the day the rule is satisfied.
Assumptions in this example
- The months are an illustrative sequence for someone who started mid-year. It assumes a sole proprietor filing Schedule C, eight years of prior work in the same line of work, and nothing else in the file as the obstacle.
- The FHA condition is at least two years in the same line of work or a related occupation, documented rather than asserted, and whether a lender uses the shorter-history allowance is confirmed lender by lender.
- FHA text here comes from HUD’s published Update 18 of Handbook 4000.1, read September 12, 2026, which lenders must implement no later than November 10, 2026. No rate, payment, or loan amount appears on this page.
Should I consider a different option instead?
Waiting is one route, and often the one that costs least. The others:
One of them has its own page here: documenting income from bank statements instead of tax returns, and I also offer loans qualified on a profit and loss statement. Both answer the documentation question rather than the calendar question. The hard to qualify hub lists the rest of these situations.
- Wait for the date, and file the return that opens the door
- You are waiting for a specific month, and filing the return that covers the full twelve months Fannie Mae’s allowance asks for is what makes the wait count.
- Build the same-field argument properly
- W-2s and prior returns turn a nice story into the documented condition the rule asks for.
- Add a co-borrower with W-2 income
- A spouse or partner documented the ordinary way can carry a file your history cannot, debts and credit included.
- A program that documents income from bank statements
- A separate route with its own history requirements, priced differently from an agency loan.
- Buy before you leave the job, if you have not left yet
- If the switch is still a plan, the simplest file you will ever have is the one you already have.
What if I have less than a year of 1099 income and closing is soon?
Tell me immediately if your employment changed while you were buying or refinancing. I review the new income situation, the documents that exist and the closing timeline before we discuss options, and I cannot promise that a different program will preserve the current closing date.
The shorter-history self-employment paths described on this page may not support that income yet. I check whether another documented source of income, a co-borrower or a different program applies before telling you to wait.
Can a bank-statement loan work with a short self-employment history?
Sometimes, and it is a documentation route rather than a shortcut around history. A bank statement program reads deposits instead of the net income on filed returns, and it sets its own minimum history for the business. Changing the document does not remove the lender's duty to verify that you can repay. Whether a particular program will take a file with under two years of business history is confirmed with that lender.
The bank statement loans page explains how the deposits are read.
Can I refinance after switching from W-2 to 1099?
The same income review applies to a refinance. A lender qualifies the new loan on the income it can count today, not on the income that qualified the mortgage you already have, so a recent switch to contractor work is read the way it would be on a purchase: how long you have been doing it, what you did before, and what your returns show. Requirements vary by program and lender.
If you would rather keep your first mortgage and borrow against equity instead, the HELOC for self-employed owners covers a line qualified on bank statements, including HELOC without tax returns.
Questions people ask
Can I get a mortgage with less than 2 years self-employed?
Yes, when your earlier work was in the same field, and I offer those loans in California, Utah, Oregon and Arizona. FHA allows self-employment income between one and two years where you were previously employed in the same line of work, or a related occupation, for at least two years. Fannie Mae’s allowance for less than two years asks that your most recent signed returns reflect a full twelve months from the current business. Zach checks which one fits your file.
Does a partial year of self-employment count for anything?
It counts for less than people hope. Fannie Mae’s allowance for less than two years asks that your most recent signed returns reflect a full twelve months from the current business, and a ten-month return does not, however early it is filed. It does work on the FHA side, which measures how long you have been self-employed rather than what the return spans.
Does my old W-2 job help me now that I have left it?
More than almost anything else here, because it is a written condition. FHA allows self-employment income between one and two years only where you were previously employed in the same line of work, or a related occupation, for at least two years, and Fannie Mae asks for documented prior income at the same level or better in the same field. Bring the W-2s to the first conversation rather than to underwriting.
What if my income dropped when I switched?
It is common and handled less gently than you would like. FHA uses the lesser of the two-year average, the average over the time the income has been earned where a shorter history is permitted, or the one-year average.
Where effective income has fallen by more than twenty percent over the analysis period, FHA directs the file into manual underwriting. A first-year dip is worth discussing early.
Does forming an LLC or an S corporation change anything?
Not the clock. Fannie Mae treats anyone with a twenty-five percent or greater ownership interest as self-employed, so an entity does not reset the history.
What it changes is the paperwork, because those entities bring their own returns and schedules into the file. Entity choice is a decision for your accountant, just not one that shortens a length-of-history test.
Will asking about this affect my credit score?
Asking does not. No credit pull happens from a conversation.
A purchase application is a separate step, and Zach tells you first.
Does my old W-2 job count toward my 1099 work history?
It counts as the prior work the shorter paths require, not as self-employment time. FHA’s one-to-two-year allowance needs at least two years previously employed in the same line of work or a related occupation, and Fannie Mae asks for documented prior income at the same or a greater level in the same field. The clock on the business itself starts when the contractor work started.
Does a partial-year 1099 count as a full year of self-employment?
On a conventional file, no. Fannie Mae’s allowance asks that your most recent signed returns reflect a full twelve months from the current business, and a return covering part of a year does not, however early it is filed. FHA measures how long you have been self-employed rather than what the return spans, with the same-field condition attached.
Will a new contract replace the need for filed income records?
Not under the agency rules on this page. Fannie Mae’s standard documentation for a self-employed borrower is the filed federal returns with all schedules, or IRS transcripts, and FHA’s length test counts time self-employed. A signed contract shows future work; it does not show a history. Bring it anyway, because it helps explain the business.
Can I qualify if another borrower has sufficient documented income?
Sometimes. A co-borrower documented the ordinary way can carry a file your history cannot, and the lender then counts their income, debts and credit alongside yours. How your contractor income is treated in that file depends on the program. Whether the combined file works is a calculation Zach runs before anything is submitted.
Do bank statements remove the two-year business-history requirement?
No. A bank statement program replaces the tax return as the income document; the program still sets a minimum business history of its own, and lenders differ. Zach confirms that requirement with the lender before you apply.
Should I tell my broker before changing to contractor work?
Yes, before you sign anything, and especially if you are already under contract on a home. Fannie Mae’s general income rule says that when the lender is notified the borrower is transitioning to a lower pay structure, for example due to a new job, the lender must use the lower income amount in qualifying. A switch to contractor work also changes which rulebook applies and which documents exist. If the switch is still a plan, the simplest file you will ever have is the one you already have.
How Zach thinks about this one
Two questions, in this order. When did you go self-employed, and what were you doing the year before that.
The second one is the surprise. If you were doing the same work for an employer, the rules have a written path much shorter than the two years you were quoted. If you switched careers, they do not, and I will say so early.
Then I ask what you have filed, not what you earned. I have talked to people who were eligible months earlier and did not know, because the return sat on extension. What would change my answer: under the twelve months either agency’s shorter path needs, a career change, nothing filed, or income that fell.
What will Zach ask me?
Two facts get this most of the way, and none of it needs a document first.
- The month and year you went self-employed.
- What you did for work in the two years before that, and whether it was the same line of work.
- Whether that earlier work was a W-2 job, and whether you can lay hands on the W-2s.
- Which tax returns you have filed, which are on extension, and what period each one covers.
- When you want to buy, and whether anyone else would be on the loan with you.
Straight answers to the questions people ask next
- Can I get a HELOC with 1099 or gig income?
- Can I get a HELOC if my business is less than two years old?
- Can I get a mortgage when I move my self-employed business to another state?
- My write-offs made my income look too small. Can I still get approved?
- I changed jobs or had a gap. Does that stop me from getting a mortgage?
- Do doctors, teachers and nurses get special mortgages? Professional programs and 1099 income by career
Talk it through
Would rather talk it through first?
Call or text Zach directly at (949) 537-1260. This is a direct line to Zach's cell. You can text anytime, and he answers it himself when he is free. During normal business hours he is happy to take a call whenever it fits, so reach out even with a quick question.
If you would rather leave your name and number, the short form at the end of this page reaches Zach the same way. It is not an application and it does not pull your credit.
Sources and checked dates
Sources: Confirmed by Zach, October 17, 2026 (via the Chief of Staff) (checked 2026-10-17) · Fannie Mae selling guide, B3-3.5-01, underwriting factors and documentation for a self-employed borrower (checked 2026-09-12) · FHA single family housing policy handbook 4000.1, Update 18, section II.A.4.c.x (checked 2026-09-12) · Fannie Mae selling guide, B3-3.1-01, general income information (checked 2026-09-28) · Consumer Financial Protection Bureau, what is a qualified mortgage (checked 2026-09-10) · Experience.com profile (checked 2026-09-24) · Supplied by Zach, September 9, 2026 (checked 2026-09-09) · Confirmed by Zach, October 2026 (checked 2026-10-19).
Show each claim on this page, what it depends on, and the date it was checked (12)
| What we say, and what it depends on | Source | Checked |
|---|---|---|
| Zach offers loans qualified on a prepared profit and loss statement instead of the net income on tax returns; West Capital Lending offers them, and he arranges them. | Confirmed by Zach, October 17, 2026 (via the Chief of Staff) | 2026-10-17 |
| Fannie Mae’s selling guide says it “generally requires lenders to obtain a two-year history of the borrower’s prior earnings as a means of demonstrating the likelihood that the income will continue to be received.” | Fannie Mae selling guide, B3-3.5-01, underwriting factors and documentation for a self-employed borrower | 2026-09-12 |
| The same section allows less than two years in a narrow case: “the income of a person who has less than a two-year history of self-employment may be considered, as long as the borrower’s most recent signed personal and business federal income tax returns reflect a full year (12 months) of self-employment income from the current business.” It also asks for documentation of prior income “at the same (or greater) level and in a field that provides the same products or services as the current business, or in an occupation in which they had similar responsibilities.” | Fannie Mae selling guide, B3-3.5-01, underwriting factors and documentation for a self-employed borrower | 2026-09-12 |
| Fannie Mae treats ownership as the trigger: “any individual who has a 25% or greater ownership interest in a business is considered to be self-employed.” The standard documentation is signed federal income tax returns filed with the IRS for the past two years, with all applicable schedules, or IRS-issued transcripts of those returns. | Fannie Mae selling guide, B3-3.5-01, underwriting factors and documentation for a self-employed borrower | 2026-09-12 |
| FHA states the length test twice, in the same words, for scored and manually underwritten files: “The Mortgagee may consider Self-Employment Income if the Borrower has been self-employed for at least two years,” and “If the Borrower has been self-employed between one and two years, the Mortgagee may only consider the income as Effective Income if the Borrower was previously employed in the same line of work in which the Borrower is self-employed or in a related occupation for at least two years.” | FHA single family housing policy handbook 4000.1, Update 18, section II.A.4.c.x | 2026-09-12 |
| FHA tells the lender to calculate gross self-employment income using the lesser of the average earned over the previous two years, or over the length of time the income has been earned if less than two years where permitted, or the average earned over the previous one year. | FHA single family housing policy handbook 4000.1, Update 18, section II.A.4.c.x | 2026-09-12 |
| FHA requires “a year-to-date Profit and Loss (P&L) statement and balance sheet if more than a calendar quarter has elapsed since the date of the most recent calendar or fiscal year-end tax period,” adds that “a balance sheet is not required for self-employed Borrowers filing Schedule C income,” and requires an audited profit and loss statement or a signed quarterly tax return only where the income used to qualify exceeds the two-year average of the tax returns. | FHA single family housing policy handbook 4000.1, Update 18, section II.A.4.c.x | 2026-09-12 |
| Fannie Mae’s general income section says: “If the lender is notified that the borrower is transitioning to a lower pay structure, for example due to pending retirement or a new job, the lender must use the lower income amount in qualifying, and must determine that the lower amount is stable and predictable.” | Fannie Mae selling guide, B3-3.1-01, general income information | 2026-09-28 |
| The Consumer Financial Protection Bureau’s page on qualified mortgages states that a lender must consider and verify a borrower’s current monthly income or assets, other than the value of the property that will secure the loan, and the borrower’s monthly debt. | Consumer Financial Protection Bureau, what is a qualified mortgage | 2026-09-10 |
| The Experience.com profile for “Zach vonD,” West Capital Lending, displayed a 5.0 overall rating and 66 reviews, with 10 entries visible per page, when fetched live on September 24, 2026 (UTC); the page header, pagination and embedded structured data agreed, and the newest review was dated September 23, 2026. Earlier fetches: September 10, 2026 showed 63 reviews; a cached snapshot retrieved September 9, 2026 showed 52 and was marked as crawled about three months before. | Experience.com profile | 2026-09-24 |
| Zach reports placing loans through more than one wholesale lender and program via his broker channel: the standard home equity line described on this site, plus conventional, government, bank statement and investment-property options. Individual lender names are kept off the public pages until the executed broker agreement for each is on file (California 10 CCR 2848(a)(3)). | Supplied by Zach, September 9, 2026 | 2026-09-09 |
| Zach's answers for the self-employed HELOC answers. The bank statement HELOC he offers has no set minimum time in business, so a business under two years old is fine. An unfiled or extended tax year does not matter for the bank statement HELOC, because tax returns are not part of how it qualifies; no extra documents are needed for it. He also offers a HELOC qualified on a profit-and-loss statement; it counts profit only, not losses, based on what runs through the borrower's bank accounts each month. He takes 1099 and gig earners with no business entity and no business account: any account the borrower receives income into can be used, as long as it gets frequent deposits, and those deposits count toward qualifying income. | Confirmed by Zach, October 2026 | 2026-10-19 |
Written for and accountable to: Zach von der Linden, Mortgage broker and Branch Manager, West Capital Lending.
Last updated 2026-10-20.
Verify him: NMLS Consumer Access, ID 1652805 · 66 reviews on Experience.com.
Sources for product claims are listed on this page, with the date each was checked.
Let's talk through your situation.
Tell me what you're buying and where you are in the process. I'll help you understand what needs to be reviewed before you move forward.
No credit pull happens from a conversation. Texts go to Zach's cell.